The Bank of China continued to widen its presence in the Australian banking market in 2022 by deepening its ties with mortgage brokers such as AFG and Choice.
The bank’s APRA regulated subsidiary – Bank of China Australia Limited (BOCAL) – posted a record net profit of A$37.3 million over the 12 months to the end of December on the back of solid loan and deposit growth.
BOCAL remains one of Australia’s fastest-growing retail banks, although its deposit growth slowed in 2022 amid intense price competition from customer owned banks and regional banks.
The subsidiary’s total deposit base grew by more than $300 million or 8.8 per cent to $4.1 billion last year.
According to APRA monthly data, about 87 per cent or $3.6 billion of BOCAL’s deposit base is sourced from retail customers.
BOCAL currently ranks as the 24th largest holder of retail deposits in Australia after it was overtaken in April by Judo Bank.
The focus of the subsidiary’s lending activities is almost exclusively on the housing market, with corporate funding products marketed through the Bank of China’s discrete branch entity in Sydney.
BOCAL continued to outpace most other domestic home lenders last year as it deepened its presence in the broking market.
The business increased its loan book by more than $820 million or 17 per cent to $5.58 billion.
This makes BOCAL the 18th largest APRA-regulated home lender ahead of IMB ($5.1 billion) and below P&N Bank ($5.9 billion).
Despite its rising prominence in Australian banking, BOCAL remains one of the most media-shy organisations in the industry.
The bank’s chairman – former Labor politician Professor Stephen Martin – did not provide a commentary on the bank’s performance in the annual report filed to ASIC last month.
This is consistent with the subsidiary’s past reporting practices but raises questions about the degree to which foreign-owned banks should be required to give more insight into their local operations when they are holding billions worth of household deposits that are guaranteed by Commonwealth taxpayers.